The Franchise Buying Process

THE FRANCHISE BUYING PROCESS

HOW LONG DOES IT TAKE TO BUY A FRANCHISE?

If you’re new to franchising, you may be wondering how long it takes to buy a franchise from a time perspective.

The actual time will depend on a number of factors to include the following:

  • How motivated you are to buy a franchise?
  • How methodical are you in your due diligence process?
  • Do you have the financial resources readily available to buy a franchise?
  • How much time do you have available to spend on the due diligence process?
  • Do you have a spouse or partners involved in the process?
As a rule of thumb, it typically takes between three-to-six months to buy a franchise from the time you first start your investigations. I have outlined the process below to help you understand what a typical franchise investor experiences in the franchise buying process.

STEP 1 – EDUCATING YOURSELF

The majority of people that investigate franchising are doing so for the first time. It’s essential that you take the time to learn about franchising and understand all that is involved. I educate my clients about franchising and have several PDF documents that will give you what you need to know as you move forward. I also recommend The Franchise MBA by Nick Neonakis, which is an Amazon Best Seller and a great book for those just starting their franchising investigations. Click here to get your FREE copy.

STEP 2 – EXPLORING FRANCHISE OPTIONS

There are over 3,500 active franchises in the United States, and it is almost impossible for you to be able to tell what franchise options could be the best fit for you. As a professional franchise consultant (matchmaker), I utilize an effective process for helping people identify those franchises that could be the “right” fit. I have outlined my process on the consulting page of this website and also welcome you to download my Client Guide to Using a Franchise Consultant. It will provide you with a detailed overview of how I help people determine which franchise options may be best suited to help them achieve their lifestyle and financial goals.

Slide Free resource FREE RESOURCE CONSULTATION AND MATCHMAKING PROCESS At Smart Franchise Investing, we have a great process for helping people understand the franchise due diligence process and determine those franchise options that make the most sense for them. This document outlines that process and should be used as a resource as you are working with us so you can make the most of our FREE franchise consultation and matchmaking services. It’s also recommended that you share this document with your spouse or a partner that may be involved in your decision making process. DOWNLOAD Slide The Now Massage FEATURED FRANCHISE THE NOW MASSAGE The NOW is a boutique massage studio and lifestyle brand that provides a space to escape the daily pressures of life. Founded on the idea of being in the moment, The NOW fills the void in the market for a high-quality, affordable massage in a serene setting—without the need to commit to the whole spa experience. From soothing add-ons, to crystal healing, to herbal heat therapy, clients enjoy a customizable luxury experience that doesn’t break the bank. LEARN MORE The Now Investment: $414,850 - $692,600
Franchise Fee: $60,000
Royalty: 6%
Locations: 16 open / 100 sold Slide FEATURED FRANCHISE NAUTICAL BOWLS FEATURED FRANCHISE NAUTICAL BOWLS Consumers are increasingly seeking healthier eating options and Nautical Bowls has what they’re looking for - fresh açai bowls that are organic, dairy-free, gluten-free and plant-based with no refined sugars. They serve up bowls in two minutes or less packed with superfoods containing essential vitamins and nutrients. With a truly unique product offering, low-cost investment, and highly profitable business model, Nautical Bowls is strongly positioned to be the next healthy fast-casual leader. LEARN MORE NAUTICAL BOWLS Investment: $150,000 - $250,000
Franchise Fee: $30,000
Royalty: 6%
Locations: 7 open / 29 sold Slide HELLO GARAGE FEATURED FRANCHISE HELLO GARAGE Let’s face it, for most people, the garage is the home’s true front door. So, at Hello Garage, their mission is to transform garages and create remarkable customer experiences — they elevate the garage from cluttered junk drawer to America’s true front door. The possibilities for residential garage transformation are endless, but the Hello Garage franchise currently focuses on concrete floor coatings, storage cabinets and accessories like slat wall and lighting. LEARN MORE HELLO GARAGE Investment: $118,309 - $159,679
Franchise Fee: $49,500
Royalty: 6%
Locations: 29 open / 100 sold Slide FREE CHECKLIST FREE RESOURCE THE ULTIMATE FRANCHISE BUYERS CHECKLIST New to franchising and not sure how to best investigate a franchise opportunity? Not all franchise companies are created equal and not all franchises are the right fit for you. My Ultimate Franchise Buyers Checklist breaks your investigation down into logical categories and provides you with the specific questions to ask and things to look for when buying a franchise. I welcome you to download our FREE CHECKLIST and urge you to read this document BEFORE making a decision to buy a franchise. DOWNLOAD Slide PREMIER MARTIAL ARTS FEATURED FRANCHISE PREMIER MARTIAL ARTS Founded in 2004, PMA is the leader in the martial arts industry due to its; low start up costs, proven documented systems, strong leadership, successful franchise owners, and exceptional unit level economics. PMA is focused on teaching children lessons of success such as; focus, discipline, respect, confidence, leadership, etc. Helping them become good citizens, increasing their focus, getting physical exercise, and obtaining goals. LEARN MORE PREMIER MARTIAL ARTS Investment: $108,476 - $318,237
Franchise Fee: $49,500
Royalty: 7%
Locations: 175 open / 632 sold Slide TEAMLOGIC IT FEATURED FRANCHISE TEAMLOGIC IT Virtually every small business in the country depends on technology to operate – computers, email, security, data backup, networks, and more. When their technology stops working, so does their business. TeamLogic IT franchisees provide comprehensive outsourced IT services to small and medium-sized businesses. Services include everything from simple maintenance and repair for very small businesses, all the way to complex computer and network solutions for larger sized customers. LEARN MORE TEAMLOGIC IT Investment: $110,000 - $175,000
Franchise Fee: $45,000
Royalty: 7%
Locations: 236 open

STEP 3 – SPEAKING WITH FRANCHISORS

Once you are connected with a franchise company, their first task is to make sure that you meet their requirements. Each franchise system has their own process for educating candidates about every aspect of their franchise, while they are making sure that you are a good fit for their franchise organization. Here are some of the common steps/discussions you can expect to happen over a 6 to 12 week period:

  • Introduction Call
  • Unit Economics / Finance
  • Marketing and Operations
  • Franchise Disclosure Document (FDD) Review
  • Training & Support
  • Territory / Real Estate / Construction
  • Executive Leadership Call
  • Discovery Day
  • Agreement Signing

The above process can stretch out to 12-16 weeks if you aren’t responsive and actively seeking to move forward in the franchisors process. You can stop the process at any point in time if you come to the decision that a particular franchise is not for you. Even after the first call you have with a franchisor.

I provide my clients with three documents that help them at each step in the process. This information I share is vital to those who want to get everything they can out of their conversations with franchisors and franchise owners during validation calls.

phase1 - Success Path
phase2
phase3

STEP 4 – DECISION TIME

Soon after completing your Discovery Day with the franchisor, you will receive notice as to whether the franchisor is going to extend you the opportunity to buy a franchise license (become a franchisee) for a specific territory or multiple territories. Assuming you have made a good impression and they have invited you to be part of their franchise system, now is the time you’ll need to make your decision. By this point in time you should have all of your questions answered and have prepared yourself to move forward.

Upon your acceptance, signing of the franchise agreement, and remittance of your required fees, you will officially become a franchise owner.

WHAT HAPPENS AFTER YOU SIGN A FRANCHISE AGREEMENT?

As you would expect, franchisors all have their own process for helping you learn their business model and prepare you for launching your new business. The process is quite different between brick n mortar retail businesses that require a location and services businesses that may require an industrial space, commercial space, or perhaps home-based. You may be able to get started with a service business within 90 days (sometimes less) from the time you sign your franchise agreement. Retail franchises will require you to secure a suitable location and complete interior remodeling which typically takes 6-9 months. It takes 9 to 12 months on average to open your retail (brick n mortar) business after signing your franchise agreement. And although that may seem like a long time, it goes by quick because you will be involved in a variety of training, business set-up, pre-marketing, hiring, launch, and grand opening tasks that will need to get completed.